$USDJPY Grinds Higher: Is this move for real?

The $USDJPY has officially wore traders out for the past few months as the breaks were sold into, each and every time. The technical picture has looked good for the bulls for a long time now but every attempt to break and sustain momentum was foiled.

Lets get the picture again. My thoughts and work on this pair seem to be on the side of a sustained move above 103. Then it should re-test the high 104 ranges only to break the bears backs towards 107.

The chart below shows a long wedged – coiled spring that has seen shallow pullback in the most extreme cases of the USD sell off. The base is rising , the moving averages are rising and the RSI is on a move above the peak RSI from the last attempt at the 100 mark. This should get the attention of some real players on the technical side. That wont be enough to sustain it. The pair needs a good leg up from the Yen smashing that I think is about to happen in the next few weeks. So I expect the dollar to stay firm and the yen to get crushed to peg new lows in the next 6-10 weeks. In the mean time, I trade this long side,core position and leg out at key levels and leg in at key dip support spots.

Note: The Bollinger Bands are snapping higher as price breaks above the top BB.

UJ

Nick Pirraglia

TradersThinkTank

Posted in Trader | Leave a comment

FOREX OUTLOOK~THE FED’S TAPERING OF QE– IS THE US ECONOMY READY?

Guest Post By: 
Published September 16, 2013, in Forex Outlook

After years of the Fed pumping $85bn a month into financial markets, the strength of the American recovery will be tested. The Federal Reserve chairman is expected to make the symbolic gesture this week of announcing the beginning of the end of QE…

 


Powered by Guardian.co.ukThis article titled “Bernanke set to begin Fed’s tapering of QE – but is the US economy ready?” was written by Heather Stewart and Katie Allen, for The Guardian on Sunday 15th September 2013 20.25 UTC

As Barack Obama gears up to announce Ben Bernanke’s successor, the Federal Reserve chairman is expected to make the deeply symbolic gesture this week of announcing the beginning of the end of quantitative easing – the drastic depression-busting policy that has led the Fed to pump an extraordinary $85bn (£54bn) a month into financial markets.

It will signal the Fed’s belief that the US economy is on the mend, but it could also frighten the markets and hit interest rates. So what exactly is Bernanke doing, why now – and how might it affect the UK and other countries?

WHAT WILL THE FEDERAL RESERVE DO?

After on Tuesday and Wednesday’s regular policy meeting, the Fed is widely expected to announce that it will start to “taper” its $85bn-a-month quantitative easing (QE) programme, perhaps cutting its monthly purchases of assets such as government bonds by $10bn or $15bn.

IS THAT GOOD NEWS?

It should be: it means the governors of the Fed, led by the chairman, Bernanke, believe the US economy is strong enough to stand on its own, without support from a constant flow of cheap, electronically created money – though they still have no plans to raise base interest rates from the record low of 0.25%, and they expect to stop adding to QE over a period of up to a year. “We really want to see a situation where central banks should not be pumping money into markets. It’s not a healthy thing to be doing,” says Chris Williamson, chief economist at data provider Markit.

WHY ARE THEY DOING IT NOW?

Economic data is pointing to a modest but steady recovery. House prices have turned, rising by 12% in the year to June. Unemployment has fallen to 7.3%, its lowest level since the end of 2008, albeit partly because many women and retirees have left the workforce.

Since QE on such a huge scale carries its own risks – it can distort financial markets, for example – the Fed is keen to withdraw it once it thinks an upturn is well underway. However, some recent data, including worse-than-expected retail sales figures on Friday, have raised doubts about the health of the upturn.

There’s another reason too: Bernanke’s term as governor ends in January next year, and he may feel that at least making a start on the process of tapering – marking the beginning of the end of the policy emergency that started more than five years ago – would be a fitting end to his tenure.

HOW WILL THE MARKETS REACT?

With a shrug, the Fed hopes, since it has carefully communicated its intentions. Scotiabank’s Alan Clarke said: “I think it’s pretty much priced in … Speculation began months ago, the market has already moved and we are still seeing some very robust data. The foot is on the accelerator pedal just a bit more lightly.”

However, a larger-than-expected move could still cause ripples – and a decision not to taper at all would be a shock, though some analysts believe it remains a possibility. Paul Ashworth, US economist at Capital Economics, said: “I don’t think they’ve actually decided on this ahead of time.”

WHAT WILL INVESTORS BE LOOKING FOR?

First, the scale of the reduction in asset purchases. No taper at all might suggest Bernanke and his colleagues have lingering concerns about the health of the economy; a reduction of $20bn a month or more would come as a shock. The tone of the statement, and the chairman’s subsequent press conference, will also be scrutinised, with markets hoping for reassurance that even once tapering is underway, there is no immediate plan to raise interest rates: Bernanke has previously said he doesn’t expect this to take place until unemployment has fallen to 6.5% or below. Williamson said: “I think they will accompany the announcement with a very dovish statement designed not to scare people that the economy is too weak but to reassure stimulus won’t be taken away too quickly.”

WHAT DOES IT MEAN FOR THE UK?

Long-term interest rates in UK markets have risen sharply since the early summer, at least in part because of the Fed’s announcement on tapering, and that shift, which has a knock-on effect on some mortgage and other loan rates, is likely to continue as the stimulus is progressively withdrawn.

If tapering occurs without setting off a market crash or choking off recovery, it may help to reassure policymakers in the UK that they can tighten policy once the recovery gets firmly under way, without sparking a renewed crisis. David Kern, economic adviser to the British Chamber of Commerce, said: “it will strengthen for me the argument against doing more QE in the UK.”

HOW WILL THE EUROZONE BE AFFECTED?

It could cut both ways: a strengthening US economy is a welcome market for Europe’s exporters, and if the value of the dollar increases against the euro on the prospect of higher interest rates, that will make eurozone goods cheaper.

However, the prospect of an end to QE in the US has also caused bond yields in all major markets to rise, pushing up borrowing costs – including for many governments. That could make life harder for countries such as Spain and Italy that are already in a fiscal tight spot.

WHAT ABOUT EMERGING MARKETS?

Back in May, Bernanke merely had to moot the idea of ending QE to send emerging markets reeling. A side-effect of the unprecedented flood of cheap money under QE has been that banks and other investors have used the cash to make riskier investments in emerging markets. The prospect of that tap being turned off has already seen capital pouring out of emerging markets and currencies, potentially exposing underlying weaknesses in economies that have been flourishing on a ready supply of cheap credit.

“It has triggered all sorts of significant movements around the world out of emerging markets. It’s had big ramifications for India and other parts of Asia,” said Clarke.

Central banks in Brazil and India have been forced to take action to shore up their currencies; Turkey and Indonesia also look vulnerable. Many of these markets have looked calmer in recent weeks, but the concrete fact of tapering could set off a fresh panic.

Posted in Trader | Leave a comment

TOP 10 FOREX EVENTS OUTLOOK: SEPT. 2-6

Gueest Post By: 
Published September 1, 2013, in Forex Outlook

Sept. 1, 2013 (Allthingsforex.com) – Although shortened by the Labor Day holiday, the week ahead promises to deliver a busy start to the month of September as traders watch the monetary policy decisions by five major central banks and dissect the results of the U.S. Non-Farm Payrolls report to gauge the odds of a taper announcement at the Fed’s upcoming September 17-18 meeting.

In preparation for the new trading week, here is the outlook for the Top 10 spotlight economic events that will move the markets around the globe.

1.    AUD- Reserve Bank of Australia Interest Rate Announcement, Tues., Sept. 3, 12:30 am, ET.

After reducing the benchmark rate by 25 bps last month, the Reserve Bank of Australia will not be in a hurry to cut rates again in September. But this doesn’t mean that the central bank is completely done with the rate cuts going forward, especially if the “two-speed” Australian economy continues to underperform because of slowing demand from China and other big trading partners. If this is the case in the months ahead, the Reserve Bank of Australia could be forced to announce another 25 bps rate cut by the end of the year. The Aussie dollar has fallen significantly in recent months and could stay under pressure if the central bank makes it clear that policy makers are keeping the door open to further monetary policy easing.

2.    USD- U.S. ISM Manufacturing Index, a leading indicator of economic conditions measuring activity in the manufacturing sector, Tues., Sept. 3, 10:00 am, ET.

Manufacturing activity in the U.S. has regained traction after the index unexpectedly dropped in contraction territory with a reading of 49.0 in May, but we could see a small pullback to 54.2 in August from 55.4 in July.

3.    EUR- Euro-zone GDP- Gross Domestic Product, the main measure of economic activity and growth, Wed., Sept. 4, 5:00 am, ET.

In the second quarter of the year, the euro-zone economy finally ended the six quarters long recession. The revised estimate is expected to confirm that the economy returned to growth and expanded by 0.3% q/q in Q2 after contracting by 0.2% q/q in the first quarter. The end of the recessionary period and the expansion of the manufacturing and services sectors have managed to instill optimism that the economy might be turning a corner. The EUR could continue to benefit from such expectations until the Fed begins to reduce the size of its monthly asset purchases.

4.    CAD- Bank of Canada Interest Rate Announcement, Wed., Sept. 4, 10:00 am, ET.

The Bank of Canada will not be an exception from all other major central banks that are not in a rush to call the end of the easy monetary policy cycle. Policy makers will be likely to leave the benchmark rate at the current 1.0% level. Compared with the rest of the major central banks, the Bank of Canada and the Reserve Bank of New Zealand still remain as the most likely candidates to hike rates. However, such decisions would probably be pushed further into 2014, maybe even 2015.

5.    JPY- Bank of Japan Interest Rate Announcement, Thurs., Sept. 5, around 12:00 am, ET.

Economic conditions have improved and inflationary pressures have risen in the last couple of months, creating an environment in which the Bank of Japan wouldn’t need to get more aggressive for the time being. However, the central bank will be likely to reaffirm its commitment to open-ended QE until the 2% inflation target is in sight. As the monetary policies of the Fed and the Bank of Japan diverge in the months ahead, the U.S. dollar should be able to resume its bullish trend against the yen.

6.    GBP- Bank of England Interest Rate Announcement, Thurs., Sept. 5, 7:00 am, ET.

With the U.K. economy and its largest trading partner the euro-zone improving, the Bank of England has no urgency to ease monetary policy further and will maintain the benchmark rate and the size of the Asset Purchase Program unchanged in September and maybe into the final quarter of the year. The bank’s forward guidance will keep the pound’s future direction closely linked to the results of upcoming economic data, with the GBP strengthening on good reports and facing weakness if the data disappoints.

7.    EUR- European Central Bank Interest Rate Announcement, Thurs., Sept. 5, 7:45 am, ET.

Activity in the euro-area has been picking up, ending the chronic contraction in euro-zone’s manufacturing and services sectors. But the 17-nation economy is still struggling with record high unemployment and such economic backdrop will not be supportive of the European Central Bank tightening monetary policy anytime soon. The USD should be able to regain its strength against the EUR as the Fed gets ready to take the first step towards monetary policy tightening while the European Central Bank remains stuck in an easing mode.

8.    USD- U.S. ADP Employment Report, a measure of job creation in the private sector of the U.S. economy, Thurs., Sept. 5, 8:15 am, ET.

Following the increase to 200K in July, job creation in the U.S. private sector is forecast to slow to 180K in August. A better than expected data should set an optimistic mood going into the non-farm payrolls report on Friday and could give the USD a boost.

9.    USD- U.S. ISM Non-Manufacturing Index, a leading indicator of economic conditions measuring activity in the services sector, Thurs., Sept. 5, 10:00 am, ET.

A sequence of softer ISM reports throughout the week could continue with a retreat in the Non-Manufacturing Index to 55.2 in August compared with a reading of 56.0 in July.

10.    USD- U.S. Non-Farm Payrolls and Employment Situation, the main indicator of U.S. economic health measuring job creation and unemployment, Fri., Sept. 6, 8:30 am, ET.

After a weaker than expected reading for July and the downward revisions for May and June, we could see stronger job creation in August with the economy forecast to add up to 180K jobs compared with 162K in the previous month, while the unemployment rate stays at 7.4%. An upbeat NFP report could trigger a U.S. dollar rally on expectations that tapering of monthly asset purchases may be announced right after the Fed’s two-day meeting on September 17-18.

Posted in Trader | Leave a comment

TOP 10 FOREX EVENTS OUTLOOK: AUG. 12–16

Guest Post By: 
Published August 11, 2013, in Forex Outlook

Aug. 11, 2013 (Allthingsforex.com) – The euro will take the center stage in the week ahead as traders anticipate the GDP estimate from the euro-zone to confirm expectations that the 17-nation economy has finally returned to growth in the second quarter of the year.

In preparation for the new trading week, here is the outlook for the Top 10 spotlight economic events that will move the markets around the globe.

1.    JPY- Japan GDP- Gross Domestic Product, the main measure of economic activity and growth, Sun., Aug. 11, 7:50 pm, ET.

Abenomics is expected to continue to make a positive impact in Japan with the GDP estimate forecast to show that the world’s third-largest economy stayed on a growth path, expanding by 0.9% q/q in the second quarter of 2013 after ending the recession and growing by 1.0% q/q in the first quarter of the year. The JPY strength could continue as positive economic data from Japan reduces expectations of the need for additional easing measures by the Bank of Japan.

2.    GBP- U.K. CPI- Consumer Price Index, the main measure of inflation preferred by the Bank of England, Tues., Aug. 13, 4:30 am, ET.

Inflationary pressures in the U.K. are expected to pull back to 2.8% y/y in July from the 2.9% y/y reading in June. Subdued inflation and upbeat economic data from the U.K. have significantly reduced the odds of more easing by the Bank of England, fueling a GBP rally that could extend if the economy strengthens further.

3.    EUR- Euro-zone ZEW Economic Sentiment Index, a leading indicator of economic conditions measuring the outlook of financial experts, Tues., Aug. 13, 5:00 am, ET.

The trend of improvement in the economic outlook is expected to continue with the ZEW index forecast to show a reading of 40.3 in August compared with 36.3 in the previous month. A more optimistic outlook should keep the euro supported.

4.    USD- U.S. Retail Sales, an important gauge of consumer spending measuring sales at retail establishments, Tues., Aug. 13, 8:30 am, ET.

Consumer spending in the U.S. is forecast to increase but at a slower pace by 0.2% m/m in July compared with 0.4% m/m in the previous month. The pressure on the USD could increase if economic data from the U.S. begins to soften.

5.    GBP- Bank of England Meeting Minutes, a detailed report of the bank’s latest meeting containing an outlook on monetary policy and the economy, Wed., Aug. 14, 4:30 am, ET.

As the new Governor Mark Carney stated last week, the Bank of England has designated 7% unemployment as the threshold level to signal the end of easy monetary policy. Similar to the July meeting, a 9-0 vote against more QE will not be a surprise and will make it clear that policy makers are not in a hurry to do more easing. The GBP should remain well bid if the minutes reveal that expansion of the Asset Purchase Program is off the table for the time being.

6.     EUR- Euro-zone GDP- Gross Domestic Product, the main measure of economic activity and growth, Wed., Aug. 14, 5:00 am, ET.

In the first quarter of the year, the euro-zone economy failed to return to growth and contracted by 0.2% q/q. However, the prolonged recession may have ended in the second quarter with the 17-nation economy forecast to grow by 0.2% q/q. With the recessionary period of three consecutive quarters finally coming to an end, the EUR rally could extend further on optimism that the euro-area might be turning a corner.

7.    GBP- U.K. Retail Sales, an important gauge of consumer spending measuring sales at retail establishments, Thurs., Aug. 15, 4:30 am, ET.

U.K. consumers are expected to keep their wallets open with retail sales forecast to register a larger increase by 0.7% m/m in July compared with the 0.2% m/m in June. A strong retail sales report could give the GBP a boost.

8.    USD- U.S. Industrial Production, the main gauge of industrial activity measuring the output of factories, mines and utilities, Thurs., Aug. 15, 9:15 am, ET.

Another month of expansion in the U.S. industrial sector is forecast to bring the overall industrial production gauge higher with a 0.5% m/m increase in July, after growing by 0.3% m/m in the previous month.

9.    USD- U.S. Housing Starts, an important gauge of housing market activity measuring new home construction, Fri., Aug. 16, 8:30 am, ET.

Housing starts are expected to maintain their upward momentum with an increase by 910K in July from 840K in June, while building permits inch closer to the one million mark. The USD could benefit from a report that confirms that the housing market recovery is still intact.

10.     USD- U.S. Consumer Sentiment, the University of Michigan’s monthly survey of 500 households on their financial conditions and outlook of the economy, Fri., Aug. 16, 9:55 am, ET.

The preliminary estimate of the U.S. consumer sentiment index for the month of August is forecast to show a reading of 85.6, slightly higher than 85.1in July. A weekly sequence of decent U.S. economic data should keep the expectations of a Fed tapering in September unchanged.

Posted in Trader | Leave a comment

TradersThinkTank Nails The “OPEN” Trade

Good Afternoon Traders,

I wanted to stress a key point and example of a classic trade I made in the Trading System Model last week and was able to close it out this morning.

Recall I entered into a long side trade in OPEN last week. I had two Profit Targets set with a great risk to reward entry in my system.  See the chart below for the sequence of events:

  1. System Entry long triggers in OPEN at the Pivot point on a day chart at 66.99.
  2. Volatility is then measured and the size of the trade is matched next to the risk : reward levels.
  3. Risk : Reward is automatically read as a set up with a high probability trade.
  4. The PT1 and PT2 levels were set and I double checked the stop loss based on the volatility.
  5. PT1 was hit last week at 68.89
  6. Range expansion off the breakout continues for two days as today we see an explosive move. and I hit PT2 at 71.55 today.
  7. Think Tank adjusts the last PT2 to included a PT3  above 74 and looking for more gains. I nailed 6 % today alone on PT2.

OPEN2

 

These events I record as they happen or as best of my ability on this site as they occur: See the Decision Making tab to this

See all this real time along with live alerts, real time messages and real time trades here:

http://www.marketfy.com/store/item/use-technical-analysis-to-capitalize-on-trends/preview/

Bottom Line: It’s obviously great to have a trade work as perfectly designed as the $OPEN trade did from entry to exit.

The key is risk management and having the structure in place to mange every trade and work the initial strategy to its fullest, or close to fullest, profit targets as your time line is calculated to.

Nick Pirraglia

TradersThinkTank

Posted in Trader | Leave a comment

TOP 10 FOREX EVENTS OUTLOOK: AUG. 12–16

Guest Post By: 
Published August 11, 2013, in Forex Outlook

Aug. 11, 2013 (Allthingsforex.com) – The euro will take the center stage in the week ahead as traders anticipate the GDP estimate from the euro-zone to confirm expectations that the 17-nation economy has finally returned to growth in the second quarter of the year.

In preparation for the new trading week, here is the outlook for the Top 10 spotlight economic events that will move the markets around the globe.

1.    JPY- Japan GDP- Gross Domestic Product, the main measure of economic activity and growth, Sun., Aug. 11, 7:50 pm, ET.

Abenomics is expected to continue to make a positive impact in Japan with the GDP estimate forecast to show that the world’s third-largest economy stayed on a growth path, expanding by 0.9% q/q in the second quarter of 2013 after ending the recession and growing by 1.0% q/q in the first quarter of the year. The JPY strength could continue as positive economic data from Japan reduces expectations of the need for additional easing measures by the Bank of Japan.

2.    GBP- U.K. CPI- Consumer Price Index, the main measure of inflation preferred by the Bank of England, Tues., Aug. 13, 4:30 am, ET.

Inflationary pressures in the U.K. are expected to pull back to 2.8% y/y in July from the 2.9% y/y reading in June. Subdued inflation and upbeat economic data from the U.K. have significantly reduced the odds of more easing by the Bank of England, fueling a GBP rally that could extend if the economy strengthens further.

3.    EUR- Euro-zone ZEW Economic Sentiment Index, a leading indicator of economic conditions measuring the outlook of financial experts, Tues., Aug. 13, 5:00 am, ET.

The trend of improvement in the economic outlook is expected to continue with the ZEW index forecast to show a reading of 40.3 in August compared with 36.3 in the previous month. A more optimistic outlook should keep the euro supported.

4.    USD- U.S. Retail Sales, an important gauge of consumer spending measuring sales at retail establishments, Tues., Aug. 13, 8:30 am, ET.

Consumer spending in the U.S. is forecast to increase but at a slower pace by 0.2% m/m in July compared with 0.4% m/m in the previous month. The pressure on the USD could increase if economic data from the U.S. begins to soften.

5.    GBP- Bank of England Meeting Minutes, a detailed report of the bank’s latest meeting containing an outlook on monetary policy and the economy, Wed., Aug. 14, 4:30 am, ET.

As the new Governor Mark Carney stated last week, the Bank of England has designated 7% unemployment as the threshold level to signal the end of easy monetary policy. Similar to the July meeting, a 9-0 vote against more QE will not be a surprise and will make it clear that policy makers are not in a hurry to do more easing. The GBP should remain well bid if the minutes reveal that expansion of the Asset Purchase Program is off the table for the time being.

6.     EUR- Euro-zone GDP- Gross Domestic Product, the main measure of economic activity and growth, Wed., Aug. 14, 5:00 am, ET.

In the first quarter of the year, the euro-zone economy failed to return to growth and contracted by 0.2% q/q. However, the prolonged recession may have ended in the second quarter with the 17-nation economy forecast to grow by 0.2% q/q. With the recessionary period of three consecutive quarters finally coming to an end, the EUR rally could extend further on optimism that the euro-area might be turning a corner.

7.    GBP- U.K. Retail Sales, an important gauge of consumer spending measuring sales at retail establishments, Thurs., Aug. 15, 4:30 am, ET.

U.K. consumers are expected to keep their wallets open with retail sales forecast to register a larger increase by 0.7% m/m in July compared with the 0.2% m/m in June. A strong retail sales report could give the GBP a boost.

8.    USD- U.S. Industrial Production, the main gauge of industrial activity measuring the output of factories, mines and utilities, Thurs., Aug. 15, 9:15 am, ET.

Another month of expansion in the U.S. industrial sector is forecast to bring the overall industrial production gauge higher with a 0.5% m/m increase in July, after growing by 0.3% m/m in the previous month.

9.    USD- U.S. Housing Starts, an important gauge of housing market activity measuring new home construction, Fri., Aug. 16, 8:30 am, ET.

Housing starts are expected to maintain their upward momentum with an increase by 910K in July from 840K in June, while building permits inch closer to the one million mark. The USD could benefit from a report that confirms that the housing market recovery is still intact.

10.     USD- U.S. Consumer Sentiment, the University of Michigan’s monthly survey of 500 households on their financial conditions and outlook of the economy, Fri., Aug. 16, 9:55 am, ET.

The preliminary estimate of the U.S. consumer sentiment index for the month of August is forecast to show a reading of 85.6, slightly higher than 85.1in July. A weekly sequence of decent U.S. economic data should keep the expectations of a Fed tapering in September unchanged.

Posted in Trader | Leave a comment

TOP 10 FOREX EVENTS OUTLOOK: AUG. 5-9

Guest Post By: 
Published August 4, 2013, in Forex Outlook

Aug. 4, 2013 (Allthingsforex.com) – In the week ahead, traders will watch closely the monetary policy decisions of the Reserve Bank of Australia and the Bank of Japan, as well as the Bank of England inflation report, while also keeping an eye on a sequence of data that should offer more insights on the sustainability of the recovery in the U.K. and the euro-zone.

In preparation for the new trading week, here is the outlook for the Top 10 spotlight economic events that will move the markets around the globe.

1.    EUR- Euro-zone Services PMI, a leading indicator of economic conditions measuring activity in the services sector, Mon., Aug. 5, 4:00 am, ET.

The final reading is expected to be in line with the preliminary estimate which showed activity in the euro-zone services sector inching higher to 49.6 in July from 48.3 in June. With the manufacturing sector finally expanding after a year and a half of contraction, the EUR could stay supported as the services index gets closer to the 50 boom/bust line.

2.    GBP- U.K. Services PMI, a leading indicator of economic conditions measuring activity in the services sector, Mon., Aug. 5, 4:30 am, ET.

Another strong report is expected from the U.K. services sector with the index forecast to jump to 57.4 in July from 49.6 in June. The GBP could attract more bids if the report is as good as anticipated which will reduce the odds of more easing by the Bank of England.

3.    EUR- Euro-zone Retail Sales, an important gauge of consumer spending measuring sales at retail establishments, Mon., Aug. 5, 5:00 am, ET.

Consumer spending in the euro-area is forecast to drop by 0.6% m/m in July compared with the 1.0% m/m increase in the previous month. A weak retail sales data could weigh on the EUR on expectations that the European Central Bank would be stuck in an easing mode longer than the Federal Reserve and other central banks.

4.    USD- U.S. ISM Non-Manufacturing Index, a leading indicator of economic conditions measuring activity in the services sector, Mon., Aug. 5, 10:00 am, ET.

Activity in the U.S. services sector is expected to pick up the pace with the ISM Non-Manufacturing Index forecast to increase to 53.2 in July from 52.2 in June. Despite of the Fed’s assurance that monetary policy will remain accommodative for the “foreseeable future”, further improvement in U.S. economic data could give the USD a boost on expectations that tapering of asset purchases may be still on track for September or October.

5.    AUD- Reserve Bank of Australia Interest Rate Announcement, Tues., Aug. 6, 12:30 am, ET.

The inconsistency of the Australian economic reports in recent months and signs of a slowdown in China, Australia’s largest trading partner, have increased the odds of a rate cut by the Reserve Bank of Australia. This is why a 0.25% reduction at this meeting would not be a surprise. The Australian dollar could see pressures rising if the Reserve Bank of Australia cuts the benchmark rate or hints of an impending rate cut in the near future.

6.     GBP- U.K. Industrial Production, the main gauge of industrial activity measuring the output of factories, mines and utilities, Tues., Aug. 6, 4:30 am, ET.

Months of consistent improvement in the services and the manufacturing indexes have shown promising signs that the U.K. is on a path to recovery. The report is expected to be in line with this trend as industrial production grows by 0.7% m/m in June after a flat reading in May. The GBP should be able to maintain its bullish stance if the U.K. economic data continues to boost optimism.

7.    CHF- Swiss CPI- Consumer Price Index, the main measure of inflation preferred by the Swiss National Bank, Wed., Aug. 7, 3:15 am, ET.

After rising by 0.1% m/m in June, the Swiss inflation gauge is forecast to return back in deflation territory with a drop by 0.3% m/m in July. Should deflation continue to be an issue, the Swiss National Bank will be in no hurry to let go of the franc ceiling which was set at 1.20 per euro in September, 2011.

8.    GBP- Bank of England Inflation Report, the central bank’s official analysis and outlook on inflation and the economy, Wed., Aug. 7, 5:30 am, ET.

While the CPI remains above the Bank of England’s 2% target at 2.9% y/y, inflation in the U.K. has subsided from record highs above 5% last year. If policy makers expect this trend to continue and forecast a “nascent recovery” in the months ahead, the report will reduce the probability of more QE by the Bank of England and could boost the GBP as an alternative to currencies whose central banks are committed to monetary policy easing.

9.     JPY- Bank of Japan Interest Rate Announcement, Thurs., Aug. 8, around 12:00 am, ET.

With economic conditions beginning to improve, the Bank of Japan wouldn’t need to get more aggressive at this point but will be likely to reaffirm its commitment to open-ended QE until the 2% inflation target is in sight. As the monetary policies of the Fed and the Bank of Japan diverge in the months ahead, the U.S. dollar should be able to resume its bullish trend against the yen.

10.    USD- U.S. Jobless Claims, an important gauge of labor market conditions measuring first-time claims for unemployment benefits, Thurs., Aug. 8, 8:30 am, ET.

In the aftermath of last week’s four-year low reading of 326K, the U.S. jobless claims are forecast to stay within range, rising slightly to 335K. Although the non-farm payrolls were weaker than expected, the USD should continue to benefit from improving labor market conditions in the United States.

Posted in Trader | Leave a comment

The State Of STT

Good Afternoon Traders,

As you should know, I hit my PT2 level in STT this morning at 70.50 and made a sale of 1/3 of the position. Normally, I would of sold the balance BUT STT is giving me a new level of profit to gauge in the coming days to weeks. So we will maximize the gains and trail the stop on the last 1/3 of this trade.

The daily chart of STT shows you why I will look for another leg up to the next PT target (PT3). I will average the PT2 and PT3 sales if I should hit PT3 since my sheets only use twp profit points. See my “Decision Making”  tab.

 STT has based from 68.25 to 70 the past 2 weeks. 

  • STT broke out from the larger base last month and has held up post EPS. 
  • The PT1 and PT2 levels were hit in each case after some rest and then momentum came back into the stock.
  • The $SPX shows no real signs of failing anytime soon.
  • The green arrows are PT1,PT2 and PT3.  We hit PT1 and PT2 already.
  • The yellow circle is the projected next level
  • The RSI is showing signs of a pure clean break of the 70 level. Momentum play now !

STT

I will continue to let this stock run its course as we maximize the profits under very low risk since we already booked two good sales.

Nick Pirraglia

TradersThinkTank

Posted in Trader | Tagged | Leave a comment

TOP 10 FOREX EVENTS OUTLOOK: JUL. 22-26

Guest Post By: 
Published July 21, 2013, in Forex Outlook

Jul. 21, 2013 (Allthingsforex.com) – After several days of trying to gauge the odds of tightening of the Fed’s monetary policy, in the week ahead traders will be back to watching a combination of economic data that will offer more details on the state  of the world’s largest economies.

In preparation for the new trading week, here is the outlook for the Top 10 spotlight economic events that will move the markets around the globe.

1.    USD- U.S. Existing Home Sales, the main gauge of the condition of the U.S. housing market measuring the number of closed sales of previously constructed homes, condominiums and co-ops, Mon., Jul. 22, 10:00 am, ET.

The report could confirm that the housing market recovery is still on the right track with sales of existing homes forecast to increase to 5.27 million in June, compared with 5.18 million in May.

2.    JPY- Japan Trade Balance, an important gauge of economic activity measuring the difference between imports and exports, Tues., Jul. 23, 7:50 pm, ET.

Voters in Japan gave their support to Abenomics this weekend and the weaker yen should contribute to the trend of improvement in the Japanese economy, including the balance of trade which is forecast to show a shrinking deficit of 150 billion yen in June compared with 996 billion yen trade deficit in May. Signs that the economy is getting better could lend some support to the yen on reduced expectations that the government and the Bank of Japan would step up their efforts to devalue the currency and to spur economic growth.

3.    EUR- Euro-zone Manufacturing and Services PMI- Purchasing Managers Index, a leading indicator of economic conditions measuring activity in the manufacturing and services sectors, Wed., Jul. 24, 4:00 am, ET.

Although the indexes have been inching higher in recent months, the chronic contraction in the euro-zone’s manufacturing and services sectors is expected to continue. The Manufacturing PMI is forecast to stay in contraction territory below the 50 boom/bust line for another month with a reading of 49.1 in July from 48.8 in June, while the Services PMI also heads a bit higher but still below 50 with a preliminary estimate of 48.9 in July from 48.3 in the previous month. A weaker than expected data should weigh on the EUR by confirming expectations that the European Central Bank will remain stuck in an easing mode.

4.    USD- U.S. New Home Sales, an important gauge of housing market conditions measuring sales of newly-constructed homes, Wed., Jul. 24, 10:00 pm, ET.

In line with the existing home sales, new home purchases in the U.S. are also expected to increase to 482K in June from 476K in May.

5.    NZD- Reserve Bank of New Zealand Interest Rate Announcement, Wed., Jul. 24, 5:00 pm, ET.

With the kiwi dollar pushed lower in recent months and all other central banks assuring the markets that monetary policy will stay accommodative, the Reserve Bank of New Zealand would not be likely to deviate from the current course. The NZD could weaken further if the Reserve Bank of New Zealand still sees its currency as too strong and hints that tightening policy will not be in the cards for the foreseeable future.

6.    EUR- Germany IFO Business Climate Index, a leading indicator of economic conditions measuring the outlook of businesses, Thurs., Jul. 25, 4:00 am, ET.

The business outlook in the euro-zone’s largest economy is forecast to be more optimistic as the Ifo index rises to 106.3 in July, compared with the reading of 105.9 in the previous month.

7.     GBP- U.K. GDP- Gross Domestic Product, the main measure of economic activity and growth, Thurs., Jul. 25, 4:30 am, ET.

Three consecutive quarters of contraction in the U.K. were followed by a quarter of growth in Q3 2012 only to see the economy contracting again by 0.3% q/q in the final quarter of last year. As a result, fears of unprecedented triple-dip recession in the U.K. escalated. Fortunately, in the first quarter of the year, the U.K. economy managed to avoid another recession expanding by 0.3% q/q and is expected to grow even stronger by 0.6% q/q in Q2 2013. The GBP could stage a rally as a result of a better GDP report which coupled with the 9-0 vote against more QE should reduce significantly the odds of more easing by the Bank of England.

8.    USD- U.S. Jobless Claims, an important gauge of labor market conditions measuring first-time claims for unemployment benefits, Thurs., Jul. 25, 8:30 am, ET.

The U.S. jobless claims are forecast to reach 339K, staying close to last week’s new record low of 334K. Another positive report from the U.S. labor market should keep the USD supported on expectations of a Fed tightening sooner rather than later.

9.    JPY- Japan CPI- Consumer Price Index, the main measure of inflation preferred by the Bank of Japan, Thurs., Jul. 25, 7:30 pm, ET.

Two months of rising inflationary pressures could push the Japanese national core inflation gauge to 0.3% y/y in June from 0% y/y in May and -0.4% y/y in April. With the index exiting deflation territory and heading towards the Bank of Japan’s 2% inflation target, the report could reduce expectations that the Japanese central bank will need to step up its QE campaign, which could mean less pressure on the yen.

10.     USD- U.S. Consumer Sentiment, the University of Michigan’s monthly survey of 500 households on their financial conditions and outlook of the economy, Fri., Jul. 26, 9:55 am, ET.

The U.S. consumer sentiment index is forecast to be revised slightly higher to 84.0 in July from a preliminary estimate of 83.9. Another week of decent U.S. economic data could keep the markets pricing the start of the Fed tapering of monthly asset purchases in September/October.

Posted in Trader | Leave a comment

What if the VIX fails to move lower?

What if the VIX fails to move lower?.

Posted in Trader | Leave a comment